Tax Obligations on Online Gambling Winnings in the Philippines

(Comprehensive guide for individuals; Philippine law as commonly applied up to mid-2024. Rules can change—when in doubt, consult a Philippine tax professional or the BIR.)

At a glance

Most money you win online is taxable in the Philippines. How it’s taxed depends on (1) where the platform is based, (2) your tax residency, and (3) the kind of win (lottery/raffle prize vs. betting/casino play).
Prizes and other winnings from Philippine sources (e.g., online raffles, promos, sweepstakes, lotteries, game shows) are generally hit by a 20% final withholding tax if the prize exceeds ₱10,000. Smaller prizes (₱10,000 and below) are not final-taxed; they are added to your other income and taxed at your regular graduated rate.
PCSO (lotto/sweepstakes) wins of over ₱10,000 are also typically subject to 20% final tax; ₱10,000 and below are taxed with your regular income.
Routine betting/casino wins with PAGCOR-licensed operators are usually not withheld upon at the player level; operator-level gaming taxes apply. But discrete jackpots/prizes can be treated as “prizes/other winnings” and may be final-taxed. Keep documentation.
Offshore/foreign platforms:
- Resident citizens are taxed on worldwide income, so foreign online winnings must be declared (no Philippine withholding)—taxed at graduated rates, with potential foreign tax credit limits.
- Resident aliens/non-resident citizens are taxed only on Philippine-source winnings.
- Non-resident aliens winning from a Philippine-source prize are commonly subject to final tax (often 25%) on gross, withheld by the payor when identifiable.
You generally cannot deduct gambling losses against winnings unless you are in a recognized trade or business (rare for individuals).
If tax is final-withheld, you’re usually done for that item. If not, you must self-report in your annual income tax return.

1) Legal framework (plain-English)

National Internal Revenue Code (NIRC), as amended by TRAIN: sets the 20% final tax for certain prizes and other winnings sourced in the Philippines when over ₱10,000; smaller prizes are taxed under the regular graduated brackets (up to 35% after TRAIN).
PCSO & lotto prizes follow the same ₱10,000 threshold rule (large wins final-taxed at 20%).
PAGCOR & licensed operators (including online/e-games): players’ routine betting results are generally not subject to player-level withholding; operators pay gaming taxes on gross gaming revenue “in lieu” of many other taxes. Specific jackpot-style payouts may be treated as taxable prizes.
POGO law (offshore gaming) primarily taxes operators and their employees; it doesn’t exempt Filipino residents from reporting foreign-sourced winnings they personally receive.
Anti-Money Laundering (AMLA) rules cover casinos (including internet-based). Expect KYC checks and reporting for large transactions.

Key distinction: The tax treatment differs between “prizes/other winnings” (discrete awards, jackpots, promo wins, etc.) and “betting/casino play” (ongoing wagers). The former tends to trigger withholding when Philippines-sourced and over ₱10,000; the latter often does not at the player level.

2) Who is taxed (residency & source)

Your status	What the Philippines taxes	Practical effect for online wins
Resident citizen	Worldwide income	All online wins (PH and abroad) are taxable to you; PH payors may withhold final tax on PH-source prizes; offshore wins require self-reporting.
Non-resident citizen	PH-source only	Only wins from PH-source platforms are taxable here.
Resident alien	PH-source only	Same as above—only PH-source wins are taxable.
Non-resident alien (not engaged in business)	PH-source only	Typically subject to final tax (often 25%) on PH-source prizes/wins; withheld by the payor if identifiable.

What is “source”? For prizes/winnings, the source generally tracks where the game/contest is conducted and/or where the paying entity is situated. For Philippine-licensed online games and raffles, that’s PH-source. For foreign sites aimed and paid from abroad, that’s usually foreign-source.

3) Types of online wins & how they’re taxed

A. Lotteries, sweepstakes, promos, raffles, game shows (online)

If PH-source and > ₱10,000: 20% final withholding tax on the gross prize. Payor withholds and remits. You should receive BIR Form 2306 (final tax certificate).
If PH-source and ≤ ₱10,000: Not final-taxed; it becomes part of your regular taxable income for the year (graduated rates). The payor may withhold creditable tax; keep BIR Form 2307 if issued.
If foreign-source:
- Resident citizens must declare it in the annual return (no Philippine final withholding). If a foreign tax was withheld, explore foreign tax credit (subject to limits and documentation).
- Resident aliens/non-resident citizens generally not taxed in the Philippines on that foreign-source prize.

B. Online casino, e-games, sports betting (including PAGCOR-licensed)

Philippine-licensed operators typically do not withhold income tax from routine betting wins; they themselves pay gaming taxes on gross gaming revenue.
Jackpots/bonuses/one-off prizes awarded by PH-licensed operators can be treated as “prizes/other winnings”; if > ₱10,000, the 20% final tax may apply (with withholding).
Offshore platforms (not PH-licensed):
- Resident citizens: winnings are taxable here (worldwide income) and should be declared (no PH withholding).
- Resident aliens/non-resident citizens: not taxable here if truly foreign-source.

C. Online poker, fantasy competitions, esports tourney purses

Treated like prizes/other winnings when you receive discrete awards (e.g., a tournament payout). Apply the ₱10,000 threshold rule for PH-source; foreign-source follows the residency rules above.
Cash game poker/betting profits are typically not subject to player-level withholding; residents with foreign-source profits must still self-report.

D. Crypto-denominated payouts

Taxable at fair market value in PHP on the date you receive the coins/tokens.
Later gains or losses from holding/selling the crypto are separate from the gambling win and are generally taxed under ordinary income rules (capital-gains tax in PH is narrowly defined and typically doesn’t cover crypto).

4) Can you deduct gambling losses?

Personal gambling losses are generally not deductible against income for individuals.
Deductions are typically available only if you are legitimately engaged in a trade or business (an uncommon posture for players) and meet strict substantiation. Don’t assume losses will offset wins.

5) Withholding, filing, and forms (individuals)

When final tax was withheld (20% or the applicable final rate):
- The tax is final; you do not re-compute it in your return.
- Ask for BIR Form 2306 from the payor (proof of final tax withheld).
When no final tax was withheld (e.g., PH-source prize ≤ ₱10,000; or foreign-source wins):
- Include the amount in your annual income tax return under “Other income.”
- Forms vary by your profile: 1700 (purely compensation but lost substituted-filing eligibility due to other income), 1701A/1701 (self-employed/mixed-income).
- If any creditable withholding occurred, keep BIR Form 2307 and claim it in your return.
Substituted filing caution: If you’re a purely compensation earner who otherwise qualifies for substituted filing but you received a non-final-taxed prize (≤ ₱10,000) or foreign winnings, you can lose substituted-filing eligibility and must file your own return.

6) Foreign tax credits (resident citizens)

If your foreign-source online win had foreign tax withheld, you may claim a Foreign Tax Credit (FTC) in the Philippines, subject to per-country and overall limitations, and strict substantiation (e.g., official foreign tax certificate, proof of payment, nature/source of income).
Resident aliens generally cannot claim Philippine FTCs.

7) Non-resident aliens

Non-resident alien not engaged in trade/business with PH-source prizes/winnings is commonly subject to a final tax (often 25%) on the gross, withheld by the payor (instead of the 20% rate used for residents).
Treaty relief may reduce or reallocate taxing rights if a tax treaty applies and you substantiate entitlement.

8) AMLA & large payouts (practical compliance)

Casinos (including internet-based casinos) are covered persons under AMLA. Large or suspicious transactions can trigger Customer Due Diligence and reports to the AMLC.
Expect requests for valid ID, source-of-funds, and proof of address for big wins or frequent high-value play, especially when moving funds through banks/ewallets.

9) Penalties & risks

Deficiency tax is subject to surcharge (e.g., 25% or 50% for willful falsehood) plus deficiency interest (computed with reference to the legal interest rate).
Operators have their own penalties for failing to withhold/remit; players face assessment risk if they fail to report non-final-taxed winnings, especially those paid offshore or in crypto.

10) Record-keeping checklist (keep for at least 3 years from the due date/filing)

Notices/emails from the platform confirming the win.
BIR Forms 2306/2307 (if any withholding occurred).
Screenshots/statements of the winning transaction and payout.
Bank/ewallet/crypto transaction records showing receipt (include PHP conversion at receipt date for crypto/FX).
Any foreign tax certificates if seeking FTC.
Contracts/rules of the contest or tournament (to evidence source and character of the income).

11) Worked examples

You won ₱50,000 in a PH-based online raffle.
- Payor withholds 20% final tax (₱10,000) and pays you ₱40,000.
- You’re done for that prize; keep BIR Form 2306.
You won ₱8,000 in a PH-based online promo.
- No 20% final tax (prize ≤ ₱10,000).
- Add ₱8,000 to your taxable income for the year. If you’re otherwise on substituted filing as an employee, this may require you to file your own return.
You (resident citizen) won US$2,000 from an offshore online poker site; no foreign tax withheld.
- Declare it in your PH annual return as Other income, converted to PHP on receipt date.
- Pay tax at graduated rates. No FTC (no foreign tax paid).
You (resident citizen) won HK$20,000 from a foreign sportsbook that withheld tax abroad.
- Declare the PHP equivalent; compute PH tax.
- Consider FTC for the foreign tax, within limits and with proper proof.
A non-resident alien won ₱200,000 from a PH-hosted online tournament.
- Expect final withholding (commonly 25% on gross). The payor should remit and issue proof of withholding.

12) Practical tips

Ask the payor (raffle/tournament organizer) whether final tax will be withheld and request the withholding certificate.
Separate your records for final-taxed vs. non-final-taxed winnings to avoid double taxation or missed reporting.
For offshore and crypto wins, keep meticulous timestamped records and exchange rates on the date of receipt.
If you frequently win abroad or play high-stakes, discuss treaty relief and FTC strategy with a tax adviser.
Don’t assume operator-level gaming taxes remove your obligation to report non-final-taxed prizes or foreign-source wins.

Bottom line

PH-source prizes over ₱10,000 → 20% final tax (withholding).
PH-source prizes ₱10,000 and below → report with your regular income.
Resident citizens must also report foreign online wins (no PH withholding).
Routine betting wins from PH-licensed operators typically aren’t withheld at the player level, but jackpots/discrete prizes can be.
Keep documentation and file accurately to avoid penalties.